Thinking about starting a non-profit organization in Singapore?
Well, good for you. It turns out a company limited by guarantee would be the most appropriate for that in Singapore. And, as you may have heard already, it comes with multiple exceptional benefits.
This article explores what a company limited by guarantee entails in Singapore, as well as its accompanying features, requirements, and benefits. Most importantly, though, we’ll walk you through the entire process of setting up a company limited by guarantee in Singapore.
So, read along to discover what it really takes to establish and run a non-profit organization in Singapore.
Now, starting from the top, there are three primary types of companies in Singapore. You could either incorporate a sole proprietorship, a limited liability company, or a partnership.
It’s within the second group of incorporations (LLCs) that a company limited by guarantee falls in Singapore. And according to the Singapore Companies Act, a company limited by guarantee is essentially a non-profit organization that carries out activities of public interest.
Another term for such a corporation is CLG. And examples include charities, societies, and clubs.
That said, it’s worth noting that the Accounting and Regulatory Authority of Singapore (ACRA) allows both citizens and foreigners to set up a CLG in Singapore. Plus, it grants them several outstanding benefits, which happen to set CLGs apart from the rest of the Singapore companies.
Registering a CLG in Singapore, for starters, means you get the privilege of separating the company’s liabilities from your own personal obligations. ACRA recognizes all CLGs in the country as distinct legal entities that exist autonomously.
Hence, your personal assets will be immune from legal suits arising from the company’s debts. That’s pretty much the case with private and public limited companies too.
However, unlike other limited entities in Singapore, a CLG doesn’t come with a share capital. Instead, your liability as a member of a CLG in Singapore will be limited to your contribution amount. You’ll notice that ACRA requires all CLG applications to be accompanied by company constitutions that state the amount guaranteed by each member.
So, all in all, a CLG would not be the best fit if you need payouts through dividends. ACRA completely bars you from distributing any form of returns between the members of a CLG in Singapore.
But, don’t get us wrong. You’ll be free to generate revenue. The only thing is, you’ll subsequently be required to spend the income in the company’s non-profit operations.
Don’t feel discouraged though. There are still many exceptional perks that could draw you towards a CLG in the country.
To incorporate a CLG in SG, ACRA requires the following in your application:
Here’s a step-by-step procedure of registering a CLG in SG:
Registration and incorporation is just the first step. So, make no mistake about it. There’s so much more to running and maintaining a CLG.
In essence, you’ll be required to:
And there you have it. The basics of setting up a CLG in Singapore.
It’s worth noting, however, that we’ve barely scratched the surface here. You’ll soon discover that there are way more intricate compliance requirements when you dive into the various types of Singapore CLGs.
No cause for alarm though. You don’t have to familiarize yourself with all that. Rather, you can start off by seeking professional assistance from WealthBridge. Our team of corporate and legal experts will help you incorporate your CLG in SG, as well as apply and maintain the subsequent compliance measures.